5unit Financing w/ Seller 2nd, or is there a better way?

[Graham Mink]

Hello!

I have found a 5 unit property where the Seller is willing to carry a 25% 2nd mortgage. (70k purchase price, $2300/month gross income, $1300/month expenses) Initially I thought I could have the Seller 2nd cover my down payment but my research here on BP has taught me that any bank will want at least 10% from my pocket plus closing costs, if I can even get that. Is this correct? Can I have the Seller also credit me at closing some of my closing costs? Since I would be getting $3600 in deposits and $2300 in rent (if I close in the first week of the month) these credits at closing will almost cover the $7k for my down payment share. Will that be allowed by a bank?

Another possible scenario:

The 5 units are in 3 different buildings on three individual lots that are adjacent to each other. Would it be possible to create two purchase and sale agreements, one for $1000 for one building that I can buy with cash and one for the other two buildings that I will get a loan for? (I feel that two of the three units would appraise high enough to cover the purchase price) My thought was that I could then after closing get a loan on the building I own free and clear to get my down payment back and possibly more. Is this approach legal/possible? If legal would there be any reason I wouldn't want to go this route? Has anyone done this type of deal before?

Any insight is greatly appreciated! Thank you very much!